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Business group seeks expedited ruling on LIPA tax challenges

A coalition of Long Island business groups is calling on state judges to expedite LIPA’s legal challenges to the taxes it pays on National Grid power plants, saying the delays are costing businesses and homes millions of dollars a year.

Citing the fact that 15 percent of customers’ electric bills go to taxes, including $189 million for four big power plant sites, the group called on the two judges overseeing the tax-challenges to rule on them by year’s end.

“It is unreasonable for such cases to be allowed to linger wihin the court system for any perod of time with such consequences,” the group’s leaders wrote to State Supreme Court Judge C. Randall Hinrichs and District Administrative Judge Thomas A. Adams. “No further delays should be tolerated. All the residents and businesses of Long Island are waiting.”

The coalition includes the Long Island Association, the Long Island Builders Institute, the Association for a Better Long Island, the Long Island Contractors’ Association, the Long Island Board of Realtors, and the Hauppauge Industrial Association.

A.J. Carter, a spokesman for Huntington Town, which is fighting a challenge to the Northport plant assessment, noted the cases are “complicated,” and “take time.” Nevertheless, he said, the town’s offer to freeze the assessment of the plant if LIPA and National Grid commit to repowering the plant remains.

LIPA last month briefed its trustees on the long-fought tax challenges, asserting that ratepayers who don’t live near the plants are subsidizing millions of dollars in property tax payments for schools and other services for those who do.

LIPA last year made $77 million in payments in lieu of taxes for the Northport plant, $36 million for the E.F. Barrett plant in Island Park, $28 million for the Port Jefferson plant and $17 million for the Glenwood plant. In documents, LIPA alleges the Northport plant is 95 percent overassessed.

LIPA’s taxes, payments in lieu of taxes and assessments amount to $536 million a year, or around 15 percent of ratepayers’ bills. The national average is around 5 percent, LIPA said. For the 1,579-megawatt Northport plant, LIPA pays around $48,500 per megawatt in taxes, compared to a Rockland County plant called Bowline where taxes amount to $2,375 per megawatt, LIPA said.

LIPA notes that average residential customers pay around $272 a year for various LIPA taxes. But customers in municipalities and school districts near power plants receive property tax reductions from LIPA PILOTs that exceed the LIPA taxes they pay—a benefit not shared by other ratepayers, LIPA says.

Payments to the municipalities and school districts were originally designed to compensate residents for aesthetic and environmental impacts of the plants, but many of the 1960s-era units are not used as much as they once were.


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